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EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (the “Agreement”) is entered
into as of May 15, 2008, between AURA SYSTEMS INC., a Delaware
Corporation (the “Company”) and JOSEPH DICKMAN, an
individual (the “Employee”).
WHEREAS,
the Compensation Committee of the Board of Directors of the
Company (the “Compensation Committee”) has
approved and authorized the entry into this Agreement with the
Employee; and
WHEREAS,
the parties desire to enter into this Agreement setting forth
the terms and conditions for the employment relationship of
the Employee with the Company.
NOW,
THEREFORE, in consideration of the promises and mutual
covenants and agreements herein contained and intending to be
legally bound hereby, the Company and the Employee hereby
agree as follows:
1: TERM.
The
term of this Agreement shall be for a period of three (3)
years commencing as of August 1, 2008 (the “Effective
Date”) and expiring on July 31, 2011. This period shall
hereinafter be referred to as the “Employment
Term”.
2: DUTIES/RESPONSIBILITIES.
2.1:
Position. The Company hereby agrees to employ the Employee,
and the Employee hereby agrees to serve the Company, during
the Term of Employment under the title of Vice President,
Sales.
2.2:
No Restriction on Employment. Employee represents and warrants
that there are no agreements or arrangements, whether written
or oral, in effect which would prevent Employee from rendering
exclusive services as prescribed in this Agreement to the
Company during the term hereof, and that he has not made and
will not make any commitment, agreement or arrangement, or do
any act in conflict with this Agreement.
2.3:
Duties. In his capacity as Vice President, Sales, the Employee
shall personally and diligently devote his full working
attention and energies to the performance of such duties and
responsibilities as are consistent with this position,
including, but not limited to any duties and responsibilities
as may be designated to him and which are not inconsistent
with the Employee’s position. Employee agrees to use his
best efforts to perform such duties faithfully and efficiently
and shall regularly both consult with the senior executive
officers of the Company and report directly to the
Company’s Chief Executive Officer.
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3: COMPENSATION.
3.1:
Compensation. As compensation to Employee for all services
rendered under this Agreement, the Company shall:
(i)
upon full execution of this Agreement issue to Employee one
hundred thousand (100,000) shares of the Company’s
common stock;
(ii)
grant Employee an option to purchase up to one hundred and
fifty thousand (150,000) shares of the Company’s common
stock at a fixed exercise price of three dollars ($3.00) per
share each year for three years in accordance with the
schedule set forth in EXHIBIT A. Such options shall vest
monthly; and
(iii)
the Company shall pay the Employee a salary at an annual rate
of Three Hundred Thousand Dollars ($300,000) (the “Base
Salary”). This Base Salary may be increased at such
times, if any, and in such amounts as determined by the
Compensation Committee in its discretion. Base Salary payments
shall be made in equal installments in accordance with
Company's then prevailing payroll policy.
3.2:
Benefits. During the Employment Term the Employee shall be
eligible to participate in the regular Company health
insurance benefits, vacation, and other employee benefit
plans, programs and policies established by the Company
generally for its employees or senior management.
3.3:
Bonus. If, as set forth in EXHIBIT B, during the Employment
Term the Company meets certain revenue and collection
milestones from the sale of mobile refrigeration systems,
Employee shall receive an option, each year for three years,
to purchase up to fifty thousand (50,000) shares of the
Company’s common stock at a fixed exercise price of
three dollars ($3.00) per share as set forth in EXHIBIT
B.
3.4:
Business Expenses. Subject to prior written approval of the
Employee’s direct report, during the Employment Term,
the Employee shall be authorized to incur business expenses
carrying out his duties and responsibilities in connection
with his employment. The Company will reimburse the Employee
for such expenses upon presentation of appropriate vouchers or
receipts, in accordance with its corporate expense
reimbursement policies.
3.5:
Stock Holding Period. Employee understands that any securities
offered and/or issued under this agreement are subject to
significant limitations on resale under applicable securities
laws. Employee understands that reliance upon Rule 144 under
the Securities Act for resales of the Securities requires,
among other conditions, a holding period and volume
limitations prior to the resale. The Employee understands and
hereby acknowledges that the Company is under no obligation to
register any of the Securities under the Securities Act, any
applicable state securities or “blue sky” laws or
any applicable foreign securities laws.
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3.6:
Stock Legends. The Employee consents to the placement of the
legend set forth below, or a substantial equivalent thereof,
on any certificate or other document evidencing any securities
granted to him by the Company:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE
STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO
THE SECURITIES UNDER THE SECURITIES ACT OR AN EXEMPTION FROM
THE SECURITIES ACT. ANY SUCH TRANSFER MAY ALSO BE SUBJECT TO
COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS AND THE LAWS
OF OTHER APPLICABLE JURISDICTIONS.
The
Employee further consents to the placement of one or more
restrictive legends on any securities issued in connection
with this Agreement as may be required by applicable
securities laws. Such Employee is aware that the Company will
make a notation in its appropriate records with respect to the
restrictions on the transferability of the
securities.
3.7:
Stock Issuance. All options and shares referenced herein shall
be issued subject to and in accordance with the Securities
Laws of the United States and Blue Sky laws. Employee agrees
to execute any and all documents and agreements with respect
to the issuance and exercise requested by the
Company.
4: RESTRICTIVE COVENANTS.
4.1:
Protection of Company’s Interests. To the extent allowed
by law, the Employee shall not, without the prior written
consent of the Company, perform services for any person, firm
or corporation and/or engage in any activity which would be
directly or indirectly competitive with the Company both
during the Employment Term and for a period of twelve (12)
months following expiration of this Agreement. The foregoing
will not prevent Employee from holding at any time less than
5% of the outstanding capital stock of any company whose stock
is publicly traded.
4.2:
Antisolicitation. The Employee promises and agrees that while
employed with Company, and for a period of twelve (12) months
following expiration of this Agreement or any prior
termination thereof, Employee will not, directly or
indirectly, influence or attempt to influence any person,
firm, association, partnership, corporation, or other entity
that is a contracting party with, or known to be in
negotiation with, the Company or any of its present or future
subsidiaries or affiliates to: (i) terminate any agreement
with the Company, except to the extent the Employee is acting
on behalf of the Company in good faith, or (ii) hire or
attempt to hire for employment any person who is employed by
the Company, or attempt to influence any such person to
terminate employment with the Company, except to the extent
the Employee is acting on behalf of the Company in good
faith.
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4.3:
Right to Property, Trade Secrets and Company Materials. To the
extent permitted by law, all rights worldwide with respect to
any and all intellectual or other property of any nature
produced, created or suggested by the Employee during the
Employment Term or resulting from Employee’s services
shall be deemed to be a work made for hire and shall be the
sole and exclusive property of the Company. Employee agrees to
execute, acknowledge and deliver to Company at Company's
request, such further documents as Company finds appropriate
to evidence Company's rights in such property. Further, the
Employee agrees that all styles, designs, formulae, lists,
materials, books, files, reports, correspondence, records, and
other documents (“Company Material”) used,
prepared, or made available to the Employee, shall be and
shall remain the property of the Company. Upon the termination
of his employment or the expiration of this Agreement, all
Company Materials shall be returned immediately to the
Company, and the Employee shall not make or retain any copies
thereof.
4.4:
Confidential Information. During the Term of this Agreement
and thereafter, the Employee shall not either directly or
indirectly disclose or use any Confidential Information of the
Company, its affiliates or subsidiaries, except as may be
required in the course of his employment by the Company, as
may be otherwise allowed with the written permission of the
Company, its affiliates or subsidiaries, or as may be required
by law; provided, however, that, if the Executive is required
by any subpoena, court order, regulation, or law to disclose
such information, he shall promptly notify the Company and
cooperate with the Company in seeking a protective order or
other appropriate remedy. “Confidential
Information” shall mean information about the Company,
its subsidiaries and affiliates, and their respective clients
and customers that is not available to the general public and
that was learned by the Employee in the course of his
employment by the Company, including (without limitation) any
data, formulae, information, proprietary knowledge, trade
secrets and client and customer lists and all papers, resumes,
records and the documents containing such Confidential
Information. The Employee acknowledges that such Confidential
Information is specialized, unique in nature and of great
value to the Company, and that such information gives the
Company a competitive advantage. Upon the expiration or
termination of the Employment Term, Employee shall promptly
return to Company all such information that exists in written
or oth
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